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Libyan Oil Shut Down
Due to the power struggle between the two governments in Libya, the Government of National Unity is a provisional government formed on 10 March 2021 to unify the rival Government of National Accord, based in Tripoli, and the Second Al-Thani Cabinet, based in Tobruk.
Both governments have promised elections that should have been held over ten years ago, and the situation does not look likely to change anytime soon.
It could get bad enough that the Italian or French may move again to secure the oil supply and handle the migrant crisis.
Roughly 70% of oil production has been shut down.
This could significantly impact global oil supplies and give a glimpse of Libya’s instability.
The Libyan National Oil Company halted production at the major fields, taking 700,000 barrels of oil offline daily.
The western government in Tripoli and the eastern government in Benghazi are both vying for control of the country’s oil revenues, but no one is getting much of anything right now.
This shutdown could have implications for European countries, mainly France, Spain and Italy, with Italy refining much of Libya’s crude oil.
In 2023, the biggest crude oil exporters to Italy were African countries, namely Libya, Nigeria, and Algeria.
These countries accounted for over 30 percent of crude oil imports to Italy.
With the issue with oil supply, this most likely will mean a ramp-up demand for US crude oil, which Americans won’t be mad about.
The fallout of all this shouldn’t be too significant, but it could spell trouble for Libya’s future and its energy sector.
